One of the most important ways to improve the value of a property is to change its usage.
Change building use with minor renovation. One tactic is to change from residential to retail or office, which typically get higher yields and sale price. Another way is to turn unwanted industrial into residential with a little renovation. Example: A property was rented out as a house for $1000 per month. Rented out to a wholesaler, it fetched $1500 without renovating.
Change building use after major renovation. After major renovation, find a different mix of tenants that offer higher rentals. Example: A two-storey building next to a wet market had the same tenant mix for decades. The upper floor accommodated a dingy hotel, which had low occupancy and low rates. The lower floor contained 6 small shops, leased by sundry shops, a clothes retailer, and a coffee shop. The new owner put the staircase in the centre and turned the upstairs into shop lots for small bookshops and clothes retailers. He turned the lower floor into 8 lots, housing cafes, and small retailers. With the new usage, the property yielded 5% more than his cost of funds, even with the renovation costs added to the purchase price.
Increase density. In some cases, a property may have excess land. You can put an additional house on the extra land. Another way is to demolish an old house and build apartments on it – this typically happens in or near the city centre.
Build on empty land. Many house buyers want a completed home ready to move in. By putting in the effort and time to turn vacant land into a completed house, you can earn a profit in the process, even if the market as a whole does not go up.
Subdivide land. Developers make money by dividing a large piece of land into small plots without changing its right of use. This is like buying wholesale and selling retail.
Convert land. Some developers buy agricultural land and convert them into building use.